8-KMaterial AgreementsFinancial EventsRegulation FD+1

TransDigm Group INC 8-K Report, Material Agreement (Jun 6, 2014)

Filed June 6, 2014For Securities:TDG

Summary

TransDigm Group Inc. (TDG) filed an 8-K on June 5, 2014, reporting significant financial transactions that occurred on June 4, 2014. The company entered into a Second Amended and Restated Credit Agreement, which allows for substantial financial activities, including the payment of a special dividend of up to $1.7 billion to shareholders, the issuance of new debt instruments, and an increase in revolving credit commitments. This refinancing and expansion of credit facilities indicate strategic moves to fund shareholder returns and operational flexibility. Furthermore, TransDigm issued a substantial amount of senior subordinated notes, comprising $1.15 billion in 6.00% notes due 2022 and $1.20 billion in 6.50% notes due 2024. These offerings were conducted through private placements. The company also announced a significant special cash dividend of $25.00 per share, with a record date of June 16, 2014, and a payment date of June 26, 2014. Additionally, TransDigm completed the purchase of approximately $1.209 billion of its 7.75% Senior Subordinated Notes due 2018. These actions collectively highlight a period of significant capital restructuring and shareholder capital return for TransDigm.

Key Highlights

  • 1TransDigm entered into a Second Amended and Restated Credit Agreement, enhancing its financial flexibility.
  • 2The new credit agreement permits a special dividend of up to $1.7 billion to common stock holders.
  • 3The company issued $2.35 billion in aggregate principal amount of senior subordinated notes: $1.15 billion of 6.00% Notes due 2022 and $1.20 billion of 6.50% Notes due 2024.
  • 4A new Tranche D term loan of $825 million was fully drawn on June 4, 2014, maturing on June 4, 2021.
  • 5Total revolving commitments were increased to $420 million, including a $100 million multicurrency sublimit.
  • 6TransDigm declared a special cash dividend of $25.00 per share, payable on June 26, 2014.
  • 7The company repurchased approximately $1.209 billion of its 7.75% Senior Subordinated Notes due 2018.

Frequently Asked Questions

The Second Amended and Restated Credit Agreement was primarily entered into to facilitate significant financial activities, including the payment of a substantial special dividend to shareholders, the issuance of new senior subordinated notes (the 2022 and 2024 Notes), the incurrence of new Tranche D term loans, and an increase in revolving credit commitments. It also involved amendments to certain covenants and financial covenants.

TransDigm issued a total of $2.35 billion in aggregate principal amount of senior subordinated notes. This consists of $1.15 billion of 6.00% Senior Subordinated Notes due 2022 and $1.20 billion of 6.50% Senior Subordinated Notes due 2024. Additionally, the company drew $825 million in Tranche D Term Loans.

TransDigm's board of directors authorized a one-time special cash dividend of $25.00 on each outstanding share of common stock. The record date for this dividend is June 16, 2014, and the payment date is June 26, 2014.

TransDigm announced that it accepted for purchase approximately $1.209 billion aggregate principal amount of its 7.75% Senior Subordinated Notes due 2018. This represented all notes validly tendered and not withdrawn in connection with the company's previously announced cash tender offer and consent solicitation.